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But opportunity cost is not actual cost. “If everyone just kept paying but used our service less we would be more profitable” is true, but not in any meaningful

But opportunity cost is not actual cost. “If everyone just kept paying but used our service less we would be more profitable” is true, but not in any meaningful way. Are Anthropic currently unable to sell subscriptions because they don’t have capacity?

eru 8mo ago
Opportunity costs are real. In many cases they are more real than 'actual costs'. However, I otherwise agree with you.
MaxikCZ 8mo ago
> Are Anthropic currently unable to sell subscriptions because they don’t have capacity? Absolutely! Im currently paying $170 to google to use Opus in antigravity without limit in full agent mode, because I tried Anthropic $20 subscription and busted my limit within a single prompt. Im not gonna pay them $200 only to find out I hit the limit after 20 or even 50 prompts. And after 2 more months my price is going to double to over $300, and I still have no intention of even trying the 20x Max plan, if its really just 20x more prompts than Pro.
- dtech 8mo ago
  This has a absolutely nothing to do with whether they're limited by available compute...
  - MaxikCZ 8mo ago
    What? Wouldn't they give me more than 1 prompt of compute for my $20, if they had spare?
    - esrauch 8mo ago
      I don't think that logically follows. They have a business model and are trying to capture more revenue, fully saturating your computer isn't obviously a good business strategy.
- cicko 8mo ago
  If anything, you are confirming that $170 covers heavy Opus use profitably for the provider.
mike_hearn 8mo ago
The opportunity cost isn't selling subscriptions, the cost is the gap between what they could sell the GPU time for via their API vs what they're selling it for in a flat rate subscription. If you assume API demand is unlimited and GPU supply is fixed, then the opportunity cost is the 'real' loss of revenue that comes from redirecting supply away from customers willing to pay more to customers willing to pay less.
- d1sxeyes 8mo ago
  > If you assume API demand is unlimited Doing a lot of heavy lifting here. Not everyone on a subscription plan would convert to a 200USD/mo API consumer.
  - mike_hearn 8mo ago
    No but demand comes from a lot of sources beyond vibe coders.
    - d1sxeyes 8mo ago
      True, but you need to run the optimisation function to calculate at what X does the increased revenue at lower margin from Pro Max subscribers outweigh the reduced revenue at higher margin for API consumers, and adjust your pricing to approach X. I'm sure that Anthropic have some very smart folks on that right now.

eru 8mo ago

Opportunity costs are real. In many cases they are more real than 'actual costs'. However, I otherwise agree with you.

MaxikCZ 8mo ago

> Are Anthropic currently unable to sell subscriptions because they don’t have capacity? Absolutely! Im currently paying $170 to google to use Opus in antigravity without limit in full agent mode, because I tried Anthropic $20 subscription and busted my limit within a single prompt. Im not gonna pay them $200 only to find out I hit the limit after 20 or even 50 prompts. And after 2 more months my price is going to double to over $300, and I still have no intention of even trying the 20x Max plan, if its really just 20x more prompts than Pro.

dtech 8mo ago
This has a absolutely nothing to do with whether they're limited by available compute...
- MaxikCZ 8mo ago
  What? Wouldn't they give me more than 1 prompt of compute for my $20, if they had spare?
  - esrauch 8mo ago
    I don't think that logically follows. They have a business model and are trying to capture more revenue, fully saturating your computer isn't obviously a good business strategy.
cicko 8mo ago
If anything, you are confirming that $170 covers heavy Opus use profitably for the provider.

mike_hearn 8mo ago

The opportunity cost isn't selling subscriptions, the cost is the gap between what they could sell the GPU time for via their API vs what they're selling it for in a flat rate subscription. If you assume API demand is unlimited and GPU supply is fixed, then the opportunity cost is the 'real' loss of revenue that comes from redirecting supply away from customers willing to pay more to customers willing to pay less.

d1sxeyes 8mo ago
> If you assume API demand is unlimited Doing a lot of heavy lifting here. Not everyone on a subscription plan would convert to a 200USD/mo API consumer.
- mike_hearn 8mo ago
  No but demand comes from a lot of sources beyond vibe coders.
  - d1sxeyes 8mo ago
    True, but you need to run the optimisation function to calculate at what X does the increased revenue at lower margin from Pro Max subscribers outweigh the reduced revenue at higher margin for API consumers, and adjust your pricing to approach X. I'm sure that Anthropic have some very smart folks on that right now.